Canadian universities: reading the writing on the wall

The Royal Military College of Canada (RMCC) is the only university under direct federal control, thus recent developments there indicate the Harper government's vision for post-secondary education.

This CAUT-commissioned report, whose authors include eminent economist Robin Boadway (an RMCC grad and ardent supporter of the college), describes a number of developments that merit close attention.

The principle of academic self-governance has been eroded at RMCC. For example, promotion decision are being made on the basis of budgetary, rather than academic, considerations. Although in recent years a number of faculty members have been recommended for promotion, the RMCC

declined to action these promotions because of the
monetary implications of incumbent based promotions, and that they would not be
finalized until the CMCFA [the faculty association] agreed to a new incumbent based promotion policy that
includes quotas for professorial ranks

As I understand it, a quota system would not allow any new promotions until existing professors retired. This policy has been implemented in part because the RMCC pay scale mimics that of the federal public service, where a promotion is always accompanied by a salary increase. This is not true in other Canadian universities.

Academic control over hiring is also in question. According to the report, "On at least one occasion the choice made by the appointments committee was
over-ruled by an HR participant."

Finally, the RMCC report is consistent with the theory I advanced in this previous post, that Prime Minister Stephen Harper would, if he could, like to end tenure. The reports' authors chose their words carefully:

UT’s [University teachers] do not have tenure, even if they are classified “indeterminate” (vice term) in the
federal public service. This was made clear in two legal positions obtained by the CMCFA [faculty association]. The distinction between tenure and indeterminate status is small but real
and becomes material when there are federal budgetary issues and Work Force
Adjustment requirements.

In civilian universities, as Nick Rowe describes in this superb post, it is very difficult to fire faculty members. Hence the only way to introduce a new, high-demand program is to expand the university. Indeterminate term contracts solve this problem. No demand for classics? Close the classics department, fire the classics professors, and hire new, young, dynamic professors to teach Leadership Studies.

Some readers might be thinking "But it's RMC. It's not a real university. It couldn't happen at ...." Take a look at these two charts from Statistics Canada's publication Education Indicators in Canada 2012 . The first shows Canadian per-pupil expenditures on primary education. Except in the territories, where the sheer remoteness of many communities makes education very expensive, our costs are only slightly above the OECD average.

Now take a look at the corresponding picture for universities:

The Canadian numbers in the chart above were calculated by taking total spending by universities and dividing by the number of full-time equivalent students. The Canadian average was $25,000 per year in 2008/9, in purchasing power parity adjusted US dollars, whereas the OECD average was under $15,000.

There a lot of problems with this chart. The Canadian numbers are for universities only; the OECD numbers are for the entire post-secondary sector. The numbers confound research, administration, and teaching expenditures. Professors may not be to blame for rising costs - salaries of senior administrators have been increasing more rapidly than professorial salaries in recent years.

But think of how this looks to the average Globe and Mail National Post reader. His son or daughter is an undergraduate student at one of Canada's "leading" universities - sitting in classes of 100, 200, 300, 500 people, having work evaluated by minimally trained teaching assistants, brushed off by indifferent faculty members. He sees this and thinks $25,000 per student? Really?

That the costs are justified by world-class research, world-class faculty and top-notch administration professional and student services will be a hard sell.

Comments

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To what extent is the university today a product of it's funding model? I would expect economists to comment on the importance of price signals in determining how to properly allocate expenditures. Does university funding lead to misallocations of societal resources? Universities resources? Would a Carleton student really pay 25 K a year to study polisci when there really aren't any jobs that specifically require such a degree? In the absence of a government loan or loan guarantee how would she or her family finance tuition?

Frances:
The one other thing about university expenditures per student in B.1.2.3. you might also need to consider for Canada is whether this is total university spending per student or only the provincial government share of university spending.

Livio, I just checked, and what I said in the post is correct, the number is simply total university expenditures - including things like Canadian Foundation for Innovation multi-million dollar particle accelerators - divided by the number of students. The CAUT University Almanac available at caut.ca gives slightly more informative breakdowns - there they show professorial salaries as a percentage of total costs (steadily decreasing) and tuition as a percentage of total university revenues (which I think has been steadily rising). Teaching v. research is impossible to break out.

In Cdn dollars, as opposed to US PP adjusted $$, spending averages $31,103 per student.

"His son or daughter is an undergraduate student at one of Canada's "leading" universities - sitting in classes of 100, 200, 300, 500 people, having work evaluated by minimally trained teaching assistants, brushed off by indifferent faculty members. He sees this and thinks $25,000 per student? Really?"

It find it astonishing there hasn't been much more media scrutiny of Canadian universities along these lines, especially in light of the recent escalation in tuition fees and he growing popular sense that a degree doesn't have the economic value it used to. Even writers (such as Margaret Wente and Jeffrey Simpson) who occasionally question the way the universities operate seem to uncritically accept claims that the universities are underfunded and students massively subsidized.

I find it astonishing there hasn't been much more media scrutiny of Canadian universities along these lines, especially in light of the recent escalation in tuition fees and the growing popular sense that a degree doesn't have the economic value it used to.

Giovanni - I think there is growing media scrutiny of universities. This post is really intended as a wake-up call to people within the university sector saying: this is what the doomsday scenario looks like, and this is why I don't think it's out of the question.

Dave - thanks so much. B.t.w., I was reading your dummies for dummies post again yesterday, so helpful.

People might be less inclined to stick it to Profs if they have more tenure-like job security and the hope of retirement income sufficient to ward off their nightmares of opening tins of cat food in a squalid flat.

The Machiavellian side of me would response: Ms. Nation Post could hope that universities become more 'productive'. But maybe she should be careful what she wishes for. Universities hold the keys to the (fading) hope of a middle class existence. The difference in lifetime income for uni vs. no uni is pretty big. I suppose that gives, at least in theory, Universities a lot of room to increases prices if they don't get what they want out of Government. Though in this kind of dystopia, I suppose it'll be the 'management' who make out like bandits while 'labour' gets shafted.

Perhaps you're right. But I have a particular interest in this subject and I must say that few of the reports or opinion pieces I read ever consider questions of cost-efficiency or value-for-money. It's still much more common, I think, to see the media simply repeating the gospel according to the AUCC: the universities' problems begin and end with underfunding, which cannot be addressed without having students and their families pay more (which in turn is only fair since a university education remains a great investment). Thus, the possibility that auditorium mega-classes, for example, are a form of profit-maximization rather than something dictated by financial exigency is never considered.

"The Machiavellian side of me would response: Ms. Nation Post could hope that universities become more 'productive'. But maybe she should be careful what she wishes for. Universities hold the keys to the (fading) hope of a middle class existence. The difference in lifetime income for uni vs. no uni is pretty big. I suppose that gives, at least in theory, Universities a lot of room to increases prices if they don't get what they want out of Government."

But, in Ontario the government regulates the prices.

On a related note, I wonder what the break even is on prices? At what point does enrollment start to decline because of prices? I suspect that they could still fill the seats even after a singificant increase in fees, but that the population in those seats will change, with more wealthy students who wouldn't have gotten in before, and fewer hard working middle and working class kids (this is absent the notion that the fee increases come with increased subsidies, like the US model, or as the Universities have been touting here). There is already a high priced cadre of international students in most of Canada's universities, and it is obvious that part of that deal is that they pay more, and have different standards.

I find it really interesting that in the US, schools think that it is an advantage to raise their "sticker price" even if only a few students actually pay that amount, as a signal of quality.

whitfit "On a related note, I wonder what the break even is on prices?" -

Marginal costs are much lower than average costs, which is another factor that fuels the growth imperative Nick talks about in his post linked to above. Marginal costs are instructor+TAs salary+a very small amount of powerpoint bulbs/paper/etc pr student. Break-even for a course taught by a full time faculty member is (salary+benefits)/4+TA costs. For a contract instructor marginal costs are far lower.

Enrollment and prices is an interesting one. I'd really like to know how much push back the Ontario law schools are getting over e.g. U of T's $30,000 first year fees (still very low by US standards).

"I'd really like to know how much push back the Ontario law schools are getting over e.g. U of T's $30,000 first year fees (still very low by US standards)."

Not much yet, but legal hiring is down from the peak of the mid-2000's and there is a real shortage of articling positions for graduates - meaning that 10-15% of Ontario law grads might never become lawyers. We've already seen the impact of the slower US legal job market on US law school enrolment (its sinking like the Titanic), so it's only a matter of time up in Canada.

It probably won't be UofT that starts to feel the pressure though - the last time I checked their articling (i.e., employment) rates were pretty robust (although higher than they were when I was there). $30K a year may be a small price to pay if the UofT prestige (which is real, if not neccesarily always merited) opens doors for you post-graduation (UofT also has pretty robust student aid and loan arrangements, including arrangements by which UofT may repay some or all of your loans, so $30K isn't the real price).

The canary in the coal mine will be the University of Ottawa which, even before the recession, was having trouble placing its graduates (I think back in 2006, at the peak of the legal boom, something like 15% of its graduates hadn't secured articling positions within a year of graduation), and in 2011 accounted for over 50% of the unplaced 2010 graduates of ALL Ontario law schools (roughly 20% of its 2010 graduating class). That's an appalling statistic, and I don't know how UofO (which significantly expanded its enrollment in the mid-2000) can continue to admit as many students as it does given that it's unable to place so many graduates (it's only a matter of time before its graduates launch a class action lawsuit, as many US law students have done). I sure hope they have a debt forgiveness program.

Interestingly, you already see the impact of student demand on tuition fees at the University of Ottawa in the difference between the tuition for the common law program (whose graduates would likely end up working Ontario) and the civil law program (whose graduates would end up working in Quebec). Tuition for the former is something like twice that for the latter, no doubt reflecting the fact that the Ontario legal market is potentially much more lucrative than the Quebec market.

"Break-even for a course taught by a full time faculty member is (salary+benefits)/4+TA costs."

Let’s see…suppose the average professor makes a salary of $100K and imposes additional costs on the university of $60K (benefits, office, administrative/TA support)…suppose each fulltime professor teaches four semester-long undergraduate courses a year…that works out to instructional costs of $40K per course…if a typical course has 40 students, then cost per student-course is $1000…and if each fulltime equivalent student represents ten student-courses per year then total instructional cost per undergraduate FTE is $10K.

So…even if we (1) assume unrealistically small average class sizes (certainly for a typical large Canadian “research university”), (2) ignore the fact that much undergraduate teaching is now done by sessionals at low piece-work pay rates, and (3) fully charge the time professors spend on research and admin to the account of teaching, instructional costs only account about 40% of the revenue the average undergraduate brings to the university.

If we instead (1) assume 60 rather 40 students per class, (2) assume a third of undergraduate teaching is done by sessionals at a cost of $10K per course and (3) charge only half of each fulltime professor's time to teaching then instructional cost amounts to less than $3000 per student - which in turn is less than half of what an undergraduate pays in tuition fees at a typical Ontario university.

Ridiculous. "Prime Minister Stephen Harper" had nothing to do with the decisions made at RMC. A hidebound and highly enfranchised public service seems to have gained the edge on a hidebound and highly enfranchised academic establishment; meanwhile, RMC's mandate to prepare cadets for service in the military continues to be largely neglected by both.

Frankly, I couldn't care less about this tempest in a teapot, but I will point out that the academic community's dual insistences on a "right" to tenure and a "right" to have someone else worry about paying for it is continuing to erode the support of the public at large. Worry about your "first world problems" quietly.

Bob - interesting. I hear that some of the Ontario law schools at looking at alternatives to articles i.e. some form of additional training. Which would result in unemployed lawyers and/or downwards pressure on legal fees, rather than law school grads who never become lawyers. Better/worse/I don't know?

Giovanni - Ms National Post reader probably already is worked up. The responses are: those calculations are marginal not average costs - average costs which include the registrar's office, buildings, administration etc are much higher. Professors are paid to do research as well as teach. Research has pay-offs in terms of economic growth and development. Also, the really high value added instruction e.g. one-on-one supervision of research essays can't be delivered in the highly-profitable contract instructor in front of 200 students format. Sure, the big lectures subsidize the one-on-ones and small seminars in senior years, but that's o.k., together they make up the undergrad experience.

Billiam - ""Prime minister Stephen Harper" had nothing to do with the decisions made at RMC."

I didn't say that he did. I said that they indicated the Harper government's vision (as opposed to the Prime Minister's vision personally), and are consistent with my previous speculations about his attitude towards the institution of tenure. If you think that PMSH had nothing to do with the decisions, then you have a much lower opinion than I do of his ability to keep informed on the issues, and to provide his ministers with direction and guidance.

Frances: "I hear that some of the Ontario law schools at looking at alternatives to articles i.e. some form of additional training."

It is actually the Law Society, not the schools that govern this issue (though the schools are involved in the conversation). This might result in some downward pressure on legal fees, but realistically only in certain simple proceedings and agreements that don't require any sophisticated advice. The big law firms will still have the bulk of that market, and those fees won't be affected by newly graduated lawyers who hang out their own shingles.

Speaking as someone who paid about $20k at U of T a few years ago, and probably just missed the real downturn in the legal market, I feel really bad for people graduating today. Although most U of T students that do ok at law school will probably get articles, once you are a lawyer you still have to make a living, and most don't do it as sole practitioners, but rather as employees of firms/banks/companies/government. Those jobs are getting harder to come by too, and it will be interesting to see what happens over the next few years. I think one of the misconceptions is that there is a "legal market". In reality, one lawyer might not be able to do another lawyer's job without a lot of retraining. The fees/salary of some lawyers with experience might not go down, but for inexperienced lawyers who don't have the luxury of a firm or other organization taking them on and training them, it might be a challenging road.

Whitmore, I think there's an awful lot to be said for going to say U Calgary (disclosure, my sister teaches there) where the placement rates are about the highest in the country, or Dalhousie, where a student can have a very pleasant time for three years at a reasonable price and a get a good education. Sure, one might not end up as a practicing lawyer, but there are loads of lawyer-like jobs e.g. equity officer at a university, advisor to human resources, director of a non-profit, etc. $100,000 or so of debt makes it harder to settle for one of those jobs. And though, as Bob Smith [not his real name] says, U of T has some debt forgiveness, it stops at $100K, and it would take a lot of time to pay of $100K of debt on a $100K salary while living in Toronto..

Frances - "If you think that PMSH had nothing to do with the decisions, then you have a much lower opinion than I do of his ability to keep informed on the issues, and to provide his ministers with direction and guidance."

I would like to think that I have a realistic understanding of the scale of government, and the very limited ability that elected officials have to stay abreast on matters of day-to-day administration (witness the decision by DND's Hardship Pay Review Committee to reduce hazard pay for soliders in Afghanistan - a decision that clearly caught the gov't off-guard). I'm fairly confident that a faculty/administration pissing match at RMC is pretty much the furthest thing from Cabinet's attention.

That being said, I will concede that Cabinet has communicated its policy of containing the ballooning cost of government (the extent of the so-called budget cuts is pretty marginal), and that that policy, which is a good one, may have had an impact at RMC insofar as it has thwarted the ambitions for advancement of some academics. What I don't see is any indication of "the Harper government's vision for post-secondary education" or evidence that "Prime Minister Stephen Harper would, if he could, like to end tenure". What I do see is recognition by RMC's administrators that not everyone in a faculty can be a full professor, and that managing a budget means making hard decisions. It's not particularly surprising that the CMCFA and CAUT - being employees' unions - don't accept that premise. What is surprising is that academics - people who are presumably employed for their ability to think critically - are asking us to take the CAUT's report at face value.

Billiam. Read the report. The people who wrote it are smart, knowledgeable and sympathetic to RMC. They aren't recommending that everyone get pay raises. They're recommending a rewriting of the collective agreement that would bring the RMC model closer to that of other universities, where people would be allowed to call themselves professors when merited by their academic accomplishments, but would not necessarily get pay increases along with that change of title if the funds were not available.

Frances. I have read the report. And we've seen this movie before. Act I: "It's not about the money, it's about the recognition." Act II: "I'm a full Professor/Major-General/Senior Associate/Assistant Deputy Minister and I get paid X% less than my colleagues of similar rank in sector."

Even if that's not the report drafter's intent (and I'll take you at your word that the report is well-intentioned), that's what inevitably will happen. And that's why the issue is being contained here.

Teaching at RMC is still a pretty darn good deal for a career academic (small classes, motivated students, good pay, lots of time off, virtually no pressure to publish), and I don't entirely buy the conclusion that there will be a flight of talent if these titles aren't conferred. And I do maintain that the repeated references to Stephen Harper in your original post were distracting drive-bys that did nothing to advance your thesis.

"The responses are: those calculations are marginal not average costs - average costs which include the registrar's office, buildings, administration etc are much higher."

Fair enough. We need a proper cost accounting here, including a defensible attribution of fixed costs. Still, I doubt that such an accounting - at least one based on a reasonable estimate of what it should cost to deliver these services - would add more than a couple thousand dollars to the cost of teaching a typical undergraduate.

"Professors are paid to do research as well as teach. Research has pay-offs in terms of economic growth and development."

Could be. But it is an open question whether of all the forms of public investment available to Canadian governments supporting academic research - which pretty much by definition deals with subjects chosen because of their interest to researchers and not because of their potential economic value - is the best way to foster economic development. Moreover, one has to recognize not all disciplines were created equal when it comes to economic usefulness: if this is to be the justification then I'm afraid many types of academic research will quickly find themselves defenestrated.

"Also, the really high value added instruction e.g. one-on-one supervision of research essays can't be delivered in the highly-profitable contract instructor in front of 200 students format. Sure, the big lectures subsidize the one-on-ones and small seminars in senior years, but that's o.k., together they make up the undergrad experience."

Yes, this is important in some disciplines (philosophy, history, literature) where the production of written work by students is still a big part of the process. I suspect this is a fairly minor element of a typical undergraduate's experience in other fields. At best this justifies augmenting the estimated cost of education in those disciplines where professors can be expected to spend a much greater-than-average amount of time in dealing with individual students. But, again, I doubt that even in these cases the additonal annual cost would amount to more than a couple thousand dollars. Considering the point where we're starting from there are still a lot of dollars to be accounted for.

whitmore: "And I think the debt forgiveness at U of T requires that you are working in certain "public interest jobs" with pay below a certain threshold.:

I don't think there is a "public interest job" requirement, although you do have to be employed or seeking employment (or must have some other explanation). In practice, since full debt relief is only available to graduates making less than $55k, I suspect that many of the people who qualify for full relieve work in "public interest" jobs, but as Frances notes relief is phased above that threshold. It's actually a good model that other universities should follow (if only because if gives them an added incentive to see that their students are well equipped on graduation).